The UK has reached a free trade agreement with the European Union that came into force following the end of the transition period (31st December 2020).
The GBCC is here to help businesses adapt to the new trading arrangements and will continue to provide businesses with Brexit related support and services following the end of the transition period.
The end of the transition period brings significant changes to the ways in which businesses trade with the European Union. We have outlined below some practical steps that businesses should take to prepare for these changes.
Please note that this information does not constitute legal advice and there may be further aspects or steps specific to your business or industry which you may need to consider.
Prepare to make customs declarations
✓ Understand customs declarations and whether you will be required to complete them.
✓ Consider making use of the HMRC Customs Intermediary Grant Scheme to help prepare your business for making customs declarations
✓ Decide whether to appoint a Customs Intermediary (such as a customs broker or freight forwarder) to manage responsibility for fulfilment of key paperwork and requirements on your behalf
✓ Ensure you have your GB EORI number or EU EORI number (for those businesses making customs declarations or needing customs decisions in the EU)
✓ Check here to see if you can delay making a full customs declaration on goods imported from the EU for up to 6 months after import. This will be made available for a limited time only until July 2021 and you (or your customs intermediary) will require authorisation.
Prepare to pay import VAT and customs duties
✓ Consider using Postponed VAT accounting which will allow you to account for import VAT on your VAT return
✓ Apply for a duty deferment account here if you import regularly or wish to defer payments. This enables customs charges including customs duty, excise duty, and import VAT to be paid once a month through Direct Debit instead of being paid on individual consignments
✓ Find out the correct commodity code for your goods here so you will be able to calculate the rate of duty and import VAT you will need to pay. You can use the government’s UK Global Tariff tool here to check the duty rates that will apply from 2021 to the goods you import from countries that the UK does not have a trade agreement with.
Understand your obligations relating to the delivery of the goods
✓ Familiarise yourself with the different International Commercial Terms (Incoterms) rules which are used to clarify whether the buyer or the seller is responsible for the shipment & costs involved in delivering the goods (customs procedures, duties & tax, insurance etc)
Exporting goods to the EU on a temporary basis (e.g. for trade shows)
✓ Familiarise yourself with ATA Carnets if you are looking to move goods into the EU on a temporary basis without having to pay duties
Moving controlled or restricted goods between the UK & the EU
✓ Check here whether you need to apply for a license or certificate to bring in goods from the EU or export them to the EU from 2021
A free trade deal is an agreement between two or more countries to provide preferential access to each others markets that goes beyond World Trade Organisation (WTO Rules). Trade deals typically involve negotiations over:
The UK and the EU announced that they had reached a free trade deal (EU-UK Trade and Cooperation Agreement) on the 24th December 2020. The deal sets out the new trading arrangements from 1 January 2021 which includes:
However, businesses should be aware that:❌ UK businesses will need to comply with customs formalities and checks when moving goods across the UK/EU border
❌ No equivalence of conformity assessment meaning UK businesses will need to meet both UK and EU standards and regulations when placing goods on both markets.
❌ UK businesses that supply services in the EU will no longer have automatic access to EU markets and will need to comply with the host rules in each EU member state
❌ No mutual recognition of professional qualifications agreed in the deal
The UK government is introducing new border controls on imports coming into Great Britain from the EU in stages.
The stages are as follows:
The UK Global Tariff sets out the new post-Brexit tariff regime which is scheduled to come into effect from the 1st January 2021. It will replace the EU’s Common External tariff and will apply to imported goods from countries which trade with the UK on WTO terms.
Northern Ireland remains a part of the UK customs territory but will continue to apply EU customs rules and procedures at its ports to avoid the need for customs checks at the Irish border.
This has resulted in a range of new processes and checks that businesses need to be aware of when moving goods between Great Britain and Northern Ireland.